How to pay for college: specific scenario

[Anonymous]

Anonymous wrote:No one is ganging up on OP for prioritizing retirement or older relatives. It’s the refusal to stop this slow moving train wreck. Now the child has to transfer after thriving at the pricey school. My husband was in a similar situation - he really wanted to go to name brand OOS school. His parents wouldn’t allow it, and he admits he hated his parents all summer. He went to his state flagship and made lifelong friends and had an awesome 4 years. OP should’ve been the bad guy last year instead of letting this go down the way they did. Now child may be behind (will all the credits transfer? What about making friends? Did they lose out on merit that’s only available to freshman? Is their major capacity controlled?) and all of this - again - was totally avoidable if OP parented appropriately last year.

This exactly
I feel badly for OP but I am still confused by how she and her family got to this point. After the one year of paid-for college was complete what did you think would happen OP?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here's what I would do in your position. Explain to kid that you only saved enough for in state. So give him two options: 1) transfer and go in state for free or 2) you pay for next year out of your 529 and kid takes out loans for the following two years. It's a great deal.

Correct. That’s basically what we are discussing.

I was just hoping someone might have navigated the loan options and would weigh in.

I recognize I will need to finance it if that’s what my kid chooses. But I won’t do that unless they realize it’s a debt they’ll be on the hook for.

What does the bolded even mean? The kid can fully intend to pay the loans back, but the reality of the situation is they most likely will not initially earn enough to make monthly payments on ~$100k+ worth of student loans. Your credit is impacted if the loans go unpaid. Are you going to finance for your other 3 kids?

I feel bad for your child. Stop being wishy-washy! Clear is kind!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP i don’t have good advice (although it looks like your child really should transfer back in state but you know that). I just wanted to say I find the people on this thread particularly harsh, not sure what is going on. Maybe a couple repeat crazy posters..

You did everything you could. A 400k home is not a luxury in this area, 180hhi is actually not that much here, and taking care of your elderly parents and nephew/niece is a lot.

You seem like a great person OP, I wish you good luck

NP and I don't understand either why people are ganging up on OP who seems like a decent human being to me. I used to listen to Suze Orman a lot a decade ago and to Dave Ramsey as well and if I remember correctly, Suze used to advise to prioritize your own retirement over kids' college. I think, but could be wrong, that Dave also gives the same advice, especially to those who are behind on their retirement savings. OP, I am rooting for you and your kid and praying for a great outcome for everyone. Good luck and stay strong.

+100. Where are all the DCUM posters who usually criticize parents for prioritizing college savings over retirement?

Zero issue with her prioritizing retirement over college. I do think she should have done both. But both to cover some form of in state or cc/in state is fine. The issue is that a relative gifted a large amount and the parents quit parenting. They allowed this situation to develop and are now sitting around saying “kid will figure it out”. Kid deserves to be told what the parent can afford and subjected to long discussions about how starting off life with big loans is a really bass idea. Parents also seem to be confused about why they aren’t eligible for aid. Because you make too much money, duh!

[Anonymous]

I would still love to know OP's age, age of other kids, and whether there are non retirement savings or IRAs or savings bonds that can be used for college. That would help us know what to do next. It might be better to make kid sign promissory note rather than loan agreement.

[Anonymous]

Thank you to both posters.

Yes, literally everyone suggests prioritizing retirement over college. That’s what we are doing. And because of health issues, we need to have money available for the present and our future (including long term care down the road).

We drive old cars. We live modestly. I literally cut my own hair. Never go to Starbucks.

People criticizing me for buying an extravagant home ($400k in dc metro area) are ridiculous. We have saved as much as we could and will cover what we can for college. Pretty sure that’s what most people do. I know very few people who were lucky enough to easily cover OOS expenses.

OP, I think you are doing great financially. Having enough college savings to cover tuition for 4 kids, even in-state, is admirable on $180k IMO. That said, and at this point it doesn't help or matter, but I think you should have told kid you would not contribute at all to current school, because this situation was avoidable. Do the hard thing now and tell kid how much you can contribute per year, and let them make some decisions.

[Anonymous]

Anonymous wrote:

Thank you to both posters.

Yes, literally everyone suggests prioritizing retirement over college. That’s what we are doing. And because of health issues, we need to have money available for the present and our future (including long term care down the road).

We drive old cars. We live modestly. I literally cut my own hair. Never go to Starbucks.

People criticizing me for buying an extravagant home ($400k in dc metro area) are ridiculous. We have saved as much as we could and will cover what we can for college. Pretty sure that’s what most people do. I know very few people who were lucky enough to easily cover OOS expenses.

OP, I think you are doing great financially. Having enough college savings to cover tuition for 4 kids, even in-state, is admirable on $180k IMO. That said, and at this point it doesn't help or matter, but I think you should have told kid you would not contribute at all to current school, because this situation was avoidable. Do the hard thing now and tell kid how much you can contribute per year, and let them make some decisions.

and is the money that was not contributed for year one on the table?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here's what I would do in your position. Explain to kid that you only saved enough for in state. So give him two options: 1) transfer and go in state for free or 2) you pay for next year out of your 529 and kid takes out loans for the following two years. It's a great deal.

Correct. That’s basically what we are discussing.

I was just hoping someone might have navigated the loan options and would weigh in.

I recognize I will need to finance it if that’s what my kid chooses. But I won’t do that unless they realize it’s a debt they’ll be on the hook for.

35 years ago I was in a similar situation.
I got accepted to a private school that I really wanted to go to. If I went In-State, it would have been free as we qualified for Pell Grants.
My parents took out a HELOC that I needed to make the payments on that covered the difference between the aid that they school offered and tuition.
I hustled all summer - every break - during the school year etc. to make sure I never missed a payment

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Here's what I would do in your position. Explain to kid that you only saved enough for in state. So give him two options: 1) transfer and go in state for free or 2) you pay for next year out of your 529 and kid takes out loans for the following two years. It's a great deal.

Correct. That’s basically what we are discussing.

I was just hoping someone might have navigated the loan options and would weigh in.

I recognize I will need to finance it if that’s what my kid chooses. But I won’t do that unless they realize it’s a debt they’ll be on the hook for.

35 years ago I was in a similar situation.
I got accepted to a private school that I really wanted to go to. If I went In-State, it would have been free as we qualified for Pell Grants.
My parents took out a HELOC that I needed to make the payments on that covered the difference between the aid that they school offered and tuition.
I hustled all summer - every break - during the school year etc. to make sure I never missed a payment

35 years ago you could manage that because college was $20K a year, starting salaries were $20,000 a year and there were fewer college graduates. College costs more than starting salaries nowadays and almost half our population goes to college and vying for that same white collar job. Few kids are making $80,000 a year right out of college.

[Anonymous]

It’s fine to spend a year once place and move to finish your degree elsewhere that’s lower cost while working and living at home. This is the way 75% of humanity does it, if they are lucky to get a college education at all. Time for everyone to grow up.

[Anonymous]

Anonymous wrote:How does one :

#1. Not make enough to qualify for aid, but yet not have any money to pay for college?
#2 have a low mortgage and still can’t swing it?

What kid of parents does this to their kid and starts them off in life with a mountain of debt? So freaking irresponsible!

Check your privilege, hon.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Here's what I would do in your position. Explain to kid that you only saved enough for in state. So give him two options: 1) transfer and go in state for free or 2) you pay for next year out of your 529 and kid takes out loans for the following two years. It's a great deal.

Correct. That’s basically what we are discussing.

I was just hoping someone might have navigated the loan options and would weigh in.

I recognize I will need to finance it if that’s what my kid chooses. But I won’t do that unless they realize it’s a debt they’ll be on the hook for.

35 years ago I was in a similar situation.
I got accepted to a private school that I really wanted to go to. If I went In-State, it would have been free as we qualified for Pell Grants.
My parents took out a HELOC that I needed to make the payments on that covered the difference between the aid that they school offered and tuition.
I hustled all summer - every break - during the school year etc. to make sure I never missed a payment

Are we living 35 years ago?
Not sure what your point is,

[Anonymous]

Anonymous wrote:

Anonymous wrote:No one is ganging up on OP for prioritizing retirement or older relatives. It’s the refusal to stop this slow moving train wreck. Now the child has to transfer after thriving at the pricey school. My husband was in a similar situation - he really wanted to go to name brand OOS school. His parents wouldn’t allow it, and he admits he hated his parents all summer. He went to his state flagship and made lifelong friends and had an awesome 4 years. OP should’ve been the bad guy last year instead of letting this go down the way they did. Now child may be behind (will all the credits transfer? What about making friends? Did they lose out on merit that’s only available to freshman? Is their major capacity controlled?) and all of this - again - was totally avoidable if OP parented appropriately last year.

This exactly
I feel badly for OP but I am still confused by how she and her family got to this point. After the one year of paid-for college was complete what did you think would happen OP?

The child was aware of the financial situation and yet chose to go to the expensive school. Exactly what did they think would happen?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Here's what I would do in your position. Explain to kid that you only saved enough for in state. So give him two options: 1) transfer and go in state for free or 2) you pay for next year out of your 529 and kid takes out loans for the following two years. It's a great deal.

Correct. That’s basically what we are discussing.

I was just hoping someone might have navigated the loan options and would weigh in.

I recognize I will need to finance it if that’s what my kid chooses. But I won’t do that unless they realize it’s a debt they’ll be on the hook for.

35 years ago I was in a similar situation.
I got accepted to a private school that I really wanted to go to. If I went In-State, it would have been free as we qualified for Pell Grants.
My parents took out a HELOC that I needed to make the payments on that covered the difference between the aid that they school offered and tuition.
I hustled all summer - every break - during the school year etc. to make sure I never missed a payment

Are we living 35 years ago?
Not sure what your point is,

Seriously. My son’s entire summer job earnings wouldn’t pay for one month of his tuition.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one is ganging up on OP for prioritizing retirement or older relatives. It’s the refusal to stop this slow moving train wreck. Now the child has to transfer after thriving at the pricey school. My husband was in a similar situation - he really wanted to go to name brand OOS school. His parents wouldn’t allow it, and he admits he hated his parents all summer. He went to his state flagship and made lifelong friends and had an awesome 4 years. OP should’ve been the bad guy last year instead of letting this go down the way they did. Now child may be behind (will all the credits transfer? What about making friends? Did they lose out on merit that’s only available to freshman? Is their major capacity controlled?) and all of this - again - was totally avoidable if OP parented appropriately last year.

This exactly
I feel badly for OP but I am still confused by how she and her family got to this point. After the one year of paid-for college was complete what did you think would happen OP?

The child was aware of the financial situation and yet chose to go to the expensive school. Exactly what did they think would happen?

Parent should’ve said no. Clearly parent had to provide health insurance info, drop off the student, etc. parent is complicit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is insane. What do you mean you couldn’t “rein in” your kid. You should have said”we can not afford this.”

Your choices now are your kid transfers or you take out expensive Parent Plus loans or you pull cash from your investments/savings. Those are your choices.

This is exactly right. My heart breaks for this kid. OP, why didn’t you say no? I highly doubt the kid and the relative would’ve done this behind your back. You didn’t want to be the bad guy last year and caused this issue.

Sigh

We told our kid they would need to use loans to cover whatever we can’t cover. Now I’m trying to help friends tire out the best approach.

Nobody was blindsided.

There’s still part of me that remains hopeful they’ll transfer.

So relative and student hatched this plan… and then what? You stepped back and let it all go down? Did relative take them dorm shopping? Drop them off at school? At what point did you wash your hands of this situation knowing you would eventually end up here?

Count your blessings that your children listen to you. My kid didn’t.

Having said that, they are actually very independent. I suspect if I just step back and let them figure this out, they will.

You could’ve put the kibosh on this and didn’t. Why set up the kid for disappointment?

Because I’m selfish and totally clueless like previous posters said.

Or because my adult child made a decision and ran with it.

OP, am I understanding that your "adult" child is currently a freshman in college. I am assuming that when they received their college acceptances and were in the process of making the decision of where to attend they were a senior in HS?
How can your child make that decision and run with it as you say without your input? People here are giving you a tough time because it just does not make sense. Plus, you are making yourself out to be the victim when you, as the adult, should have been leading the way for your child (or at least not so passive with such a major decision).

I haven't read this whole thread yet, but it sounds to me like OP was under the impression that the student would take out loans in their own name for the entire amount needed. So OP said to child "Find, you can go to this OOS school, but you are going to have to take out loans to cover what we can't pay."

But now is learning that the student can NOT take out loans in her own name for more than $6000 or $7500 a year - and that isn't enough. She probably needs more like $25,000 yearly in loans? $75,000 total?